Media Business: Was Reed Business Information's move to shutter and/or sell many of the titles left in its stable to former RBI managers a harbinger for other b-to-b publishers with large print portfolios?
Phillips: Media companies that are more focused on specialty sectors—United Business Media, Wolters Kluwer—are not likely to be sellers in the current environment. The deals [for RBI properties] were largely by opportunistic buyers buying at a discounted price, if any price at all. They're entrepreneurs who are going to run the businesses at a much lower cost structure and see if they can make a go of properties that couldn't work for a large corporation.
MB: Do you see the recent surge in deals continuing for the rest of the year but still at discounted prices?
Phillips: There will continue to be some deals at lower prices that are distressed deals, but we're already starting to see quality companies coming back on the market that actually make a lot of money and expect to sell at more normalized prices (of six to eight times EBITDA). These are parts of media companies that are going to be divested because of changes in strategy and focus but nevertheless are profitable and should attract a lot of interest from buyers.
MB: What are the most attractive digital assets for b-to-b companies?
Phillips: I think the appetite is somewhat limited. A lot of the b-to-b companies aren't in a position to be aggressively acquisitive in the digital media space because they're still licking their wounds from the recession, and a lot of that work is being done through internal development and not through acquisition. —M.S.